Attorney General Peter J. Nickles today announced that the District has agreed to join a settlement with Countrywide Financial Corporation resolving claims by the District and other states that Countrywide engaged in unfair and deceptive practices in its home mortgage lending. 

By committing to the settlement, the Attorney General has ensured that Countrywide will not initiate or advance foreclosures against District borrowers who may be eligible for a loan modification under the National Home Ownership Retention Program until Countrywide determines whether the borrower is interested in and qualifies for a loan modification. Qualifying modifications may be done using guidelines laid out in the agreement or the federal Making Home Affordable program. Countrywide has also committed to providing a fund of over $280,000 for payments to District borrowers who have been subject to a foreclosure and for other foreclosure prevention efforts.

Bank of America, which purchased Countrywide in July 2008, initiated the National Home Ownership Retention Program last December after reaching a settlement with several states’ Attorneys General. To be eligible for a loan modification under the program, a borrower must have received a qualifying subprime or pay option mortgage prior to 2008, the property must be a one-four unit owner-occupied residential property, and either:

• The borrower is 60 days or more delinquent and the current loan-to-value ratio is 75 percent or above;
• The borrower becomes 60 days or more delinquent at any time prior to June 30, 2012, and the loan-to-value ratio at the time of the modification is 75 percent or above; or
• The borrower is current on the mortgage but is likely to become 60 days or more delinquent as a consequence of a rate reset or contractual payment recast based on negative amortization triggers, and the loan-to-value ratio at the time of the modification is 75 percent or above.

Modifications are also subject to affordability criteria and investor approval.

For borrowers who qualify, modifications may include FHA refinancing under the HOPE for Homeowners Program, interest rate reductions, and principal reductions on pay option adjustable rate mortgages.

Countrywide has begun contacting customers who may be eligible for loan modifications. Customers with questions about eligibility for a loan modification can contact Bank of America at (800) 669-6607. For more information about the settlement, Countrywide customers may review a list of Frequently Asked Questions at consumer.dc.gov or call the consumer protection hotline at (202) 442-9828.